ACIT 9(3), MUMBAI V. QAD INDiA P. LTD, MUMBAI

ITA 7443/MUM/2010

• Counselvise Citation: 744319914 RSA 2010
• Duration Of Justice: 2 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-07-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 01-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

QAD INDIA PVT. LTD - 1 - VK;DJ VIHYH; VF/KDJ.K LH U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI JH ,P- ,Y- DKJOK] V/;{K ,OA JH JKTSUNZ FLAG YS[KK L NL; DS LE{K BEFORE HONBLE PRESIDENT SHRI H.L. KARWA AND SHRI R AJENDRA SINGH ACCOUNTANT MEMBER VK;DJ VIHY LA[;K /ITA NO.7443/MUM/2010 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR: - 2006-07 ACIT-9(3) 2 ND FLOOR, ROOM NO. 229, AAYAKAR BHAVAN, M.K. ROAD MUMBAI- 400 020. CUKE@ VS. QAD INDIA PVT. LTD UNIT NO. 5-9, PRISM TOWERS, A- WING, MINDSPACE, GOREGAON (W), MUMBAI 400 061. PAN:- AAACQ1307K VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT VIHYKFKHZ DH VKSJ LS @ APPELLANT BY SHRI UDAYA BHASKAR JAKKE IZR;FKHZ DH VKSJ LS @ RESPONDENT BY NONE VKNS'K@ VKNS'K@ VKNS'K@ VKNS'K@ ORDER PER RAJENDRA SINGH THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 17.8.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2006-07 . THE ONLY DISPUTE RAISED BY THE REVENUE IN THIS APPEAL IS REG ARDING ADDITION OF RS. 18,90,000/- MADE BY AO IN THE ASSESSMENT. LQUOKBZ DH RKJH[K @ DATE OF HEARING 26-08-2013 ?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT 28-08-2013 QAD INDIA PVT. LTD - 2 - 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE WAS ENG AGED IN THE BUSINESS OF PROVIDING APPLICATION SUPPORT, LOW END SERVICES TO QAD GROUP OF COMPANIES AND TO LOCAL CUSTOMERS USING QAD INC SOFTWARE. THE AO RECEIVED AIR INFORMATION THAT THE ACCOUNTS O F THE ASSESSEE HAD BEEN CREDITED BY THE TOTAL PAYMENT OF RS. 18,9, 0,000/- BY TWO CONCERNS NAMELY M/S DELPHI AUTOMOTIVE SYSTEMS AND M /S SCHEFENACKER MOTHORSON LTD IN THE MONTHS OF FEBRUAR Y AND MARCH 2006 AND THE TAX HAD BEEN DEDUCTED AT SOURCE IN RES PECT OF THESE PAYMENTS BUT THE ASSESSEE HAD NOT RECORDED THE SAID TRANSACTION IN THE CURRENT YEAR. AO, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE SAID AMOUNT SHOULD NOT BE ADDED TO THE TOTA L INCOME OF THE ASSESSEE. THE ASSESSEE SUBMITTED THAT THESE AMOUNTS HAD BEEN ACCOUNTED IN THE SUBSEQUENT YEAR I.E. ASSESSMENT YE AR 2007-08. IT WAS EXPLAINED THAT M/S DELPHI AUTOMOTIVE SYSTEMS HA D ACCOUNTED THE CONCERNED AMOUNTS IN THEIR BOOKS IN ASSESSMENT YEAR 2006-07 BASED ON THE MEMO INVOICES ISSUED BY THEM BUT THE C OPIES OF THE SAID MEMO INVOICES MADE IT CLEAR THAT INVOICES WERE ACTUALLY DUE IN APRIL AND MAY 2006. THE ASSESSEE HAD, THEREFORE, AC COUNTED THE INCOME IN THE NEXT YEAR. AS REGARDS THE OTHER PARTY IT WAS EXPLAINED THAT THE SAID PARTY HAD ACCOUNTED THE AMOUNT OF RS. 3,48,626/- BASED ON THE PURCHASE ORDER ISSUED BY THEM, WHEREAS THE INVOICE HAD BEEN RAISED IN APRIL 2006. THEREFORE IT WAS SUB MITTED THAT THE ASSESSEE HAD CONSIDERED BOTH THE AMOUNTS IN THE NEX T ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2007-08. THE AO HOWEVER D ID NOT ACCEPT THE EXPLANATION GIVEN. IT WAS OBSERVED BY HIM THAT THE SALES WERE AFFECTED IN ASSESSMENT YEAR 2006-07 AND THE ENTIRE AMOUNT HAD ALSO BEEN CREDITED IN THE SAID YEAR AND, THEREFORE, THE AMOUNT WAS TAXABLE IN ASSESSMENT YEAR 2006-07. THE AO ACCORDINGLY MADE ADDITION OF RS. 18,90,000/- TO THE TOTAL INCOME. QAD INDIA PVT. LTD - 3 - 3. THE ASSESSEE DISPUTED THE DECISION OF AO AND SUB MITTED BEFORE CIT(A) THAT THE ASSESSEE HAD OFFERED THE ENTIRE AMO UNT IN ASSESSMENT YEAR 2007-08 AND THE CREDIT FOR TDS HAD ALSO BEEN C LAIMED IN THAT YEAR. IT WAS, THEREFORE, URGED THAT THE ADDITION MA DE WAS DOUBLE ADDITION AND SHOULD BE DELETED. CIT(A) AFTER CONSID ERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT BASED ON THE CREDIT GIVEN BY THE DEDUCTOR AMOUNT WAS ASSESSABLE IN ASSESSMENT YEAR 2006-07, BUT SINCE THE SAME HAD ALSO BEEN ASSESSED IN ASSESS MENT YEAR 2007- 08 AND CREDIT OF TAX HAD ALSO BEEN GIVEN, IT WILL N OT BE APPROPRIATE TO ADD THE SAME AMOUNT IN THIS YEAR AS IT WOULD RESULT IN DOUBLE ADDITION. CIT(A), THEREFORE, HELD THAT PRACTICAL SO LUTION TO THE PROBLEM WAS TO NOT DISTURB THE INCOME DECLARED BY THE ASSES SEE IN THE CURRENT YEAR. HE ACCORDINGLY DIRECTED THE AO TO DELETE THE ADDITION, AGGRIEVED BY WHICH THE REVENUE IS IN APPEAL BEFORE TRIBUNAL. 4. WE HAVE HEARD BOTH THE PARTIES PERUSED, THE RECO RDS AND CONSIDERED MATTER CAREFULLY. THE DISPUTE IS REGARDI NG THE YEAR OF ASSESSABILITY OF THE PAYMENTS AGGREGATING TO RS. 18 ,90,000/- RECEIVED BY THE ASSESSEE FROM TWO CUSTOMERS I.E. M/S DELPHI AUTOMOTIVE SYSTEMS AND M/S SCHEFENACKER MOTHORSON LTD. THE AMO UNTS HAD BEE RECEIVED AND CREDITED IN THE BOOKS OF THE ASSES SEE IN ASSESSMENT YEAR 2006-07. HOWEVER SINCE THE INVOICES WERE EITHE R DUE OR RECEIVED IN APRIL AND MAY 2006, THE ASSESSEE HAD ACCOUNTED T HE INCOME IN ASSESSMENT YEAR 2007-08 IN WHICH YEAR THE CREDIT FO R TAX DEDUCTION WAS ALSO TAKEN. THE LEARNED AR FOR THE ASSESSEE SUB MITTED THAT IN THE ASSESSMENT MADE FOR ASSESSMENT YEAR 2007-08 IN WHICH THE SAID INCOME HAD BEEN DECLARED BY THE ASSESSEE AND THE IN COME HAD BEEN ACCEPTED BY THE DEPARTMENT AND THE ASSESSMENT HAS B ECOME FINAL. IT QAD INDIA PVT. LTD - 4 - WAS ALSO SUBMITTED THAT THE TAX RATE IN BOTH THE YE ARS WAS THE SAME. THESE CLAIMS OF THE ASSESSEE HAS NOT BEEN CONTROVER TED BEFORE US BY THE LEARNED DR. THEREFORE, THOUGH TECHNICALLY THE A MOUNT COULD BE ASSESSED IN ASSESSMENT YEAR 2006-07, BUT CONSIDERIN G THE FACT THAT AMOUNT HAS ALREADY BEEN OFFERED AND ASSESSED IN ASS ESSMENT YEAR 2007-08 AND TAX RATE BEING THE SAME IN BOTH THE YEA RS, WE DO NOT SEE ANY JUSTIFICATION IN ASSESSING THE SAME AMOUNT AGAI N IN ASSESSMENT YEAR 2006-07 WHICH WOULD RESULT IN DOUBLE ADDITION. WE, THEREFORE, FIND THE STAND TAKEN BY CIT (A) REASONABLE AND THE SAME IS, THEREFORE, UPHELD. 5. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED ON 28 -8-2013 SD/- SD/- (H.L. KARWA) (RAJENDRA SINGH) HONBLE PRESIDENT ACCOUNTANT MEMBER SKS SR. P.S, MUMBAI DATED .28.8.2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI